Question 1

What will be the amount of interest attributed to Cleary in the income distribution for 2019?

Accepted Answer

A)  $15,142. 
B)  $13,942. 
C)  $12,942. 
D)  $14,142. 
E)  $10,000. 
A)  $15,142. 
B)  $13,942. 
C)  $12,942. 
D)  $14,142. 
E)  $10,000.

Question 2

C contributes $38,000 to the partnership and the bonus method is used.What amount will be credited for C's beginning capital balance?

Accepted Answer

A)  $20,000 
B)  $25,000 
C)  $27,600 
D)  $32,600 
E)  $38,000 
A)  $20,000 
B)  $25,000 
C)  $27,600 
D)  $32,600 
E)  $38,000

Question 3

Which of the following could be used as a basis to allocate profits among partners who are active in the management of the partnership? 1) Allocation of salaries.
2) The number of years with the partnership.
3) The amount of time each partner works.
4) The average capital invested.

Accepted Answer

A)  1 and 2. 
B)  1 and 3. 
C)  1, 2, and 4. 
D)  1, 3, and 4. 
E)  1, 2, 3, and 4. 
A)  1 and 2. 
B)  1 and 3. 
C)  1, 2, and 4. 
D)  1, 3, and 4. 
E)  1, 2, 3, and 4.

Question 4

What was the balance in Thurman's Capital account at the end of the second year?

Accepted Answer

A)  $133,380. 
B)  $ 84,760. 
C)  $105,690. 
D)  $132,860. 
E)  $ 71,760. 
A)  $133,380. 
B)  $ 84,760. 
C)  $105,690. 
D)  $132,860. 
E)  $ 71,760.

Question 5

Which of the following is not a characteristic of a partnership?

Accepted Answer

A)  The partnership itself pays no income taxes. 
B)  It is easy to form a partnership. 
C)  Any partner can be held personally liable for all debts of the business. 
D)  A partnership requires written Articles of Partnership. 
E)  Each partner has the power to obligate the partnership for liabilities. 
A)  The partnership itself pays no income taxes. 
B)  It is easy to form a partnership. 
C)  Any partner can be held personally liable for all debts of the business. 
D)  A partnership requires written Articles of Partnership. 
E)  Each partner has the power to obligate the partnership for liabilities.

Question 6

Which of the following type of organization is classified as a partnership, or similar to a partnership, for tax purposes? (I.) Limited Liability Company
(II.) Limited Liability Partnership
(III.) Subchapter S Corporation

Accepted Answer

A)  II only. 
B)  II and III. 
C)  I and II. 
D)  I and III. 
E)  I, II, and III. 
A)  II only. 
B)  II and III. 
C)  I and II. 
D)  I and III. 
E)  I, II, and III.

Question 7

Record the journal entry to allocate the salary of Noris.

Accepted Answer

The answer of Record the journal entry to allocate the...

Question 8

By what methods can a person gain admittance to a partnership?

Accepted Answer

A person can gain admittance t

Question 9

Which of the following statements is correct regarding the admission of a new partner?

Accepted Answer

A)  A new partner must purchase a partnership interest directly from the business. 
B)  The right of co-ownership in the business property can be transferred to a new partner without the consent of other existing partners. 
C)  The right to participate in management of the business cannot be conveyed without the consent of other existing partners. 
D)  The right to share in profits and losses can be sold to a new partner without the consent of other existing partners. 
E)  A new partner always pays book value. 
A)  A new partner must purchase a partnership interest directly from the business. 
B)  The right of co-ownership in the business property can be transferred to a new partner without the consent of other existing partners. 
C)  The right to participate in management of the business cannot be conveyed without the consent of other existing partners. 
D)  The right to share in profits and losses can be sold to a new partner without the consent of other existing partners. 
E)  A new partner always pays book value.

Question 10

What was Cleary's capital account balance at the end of 2018?

Accepted Answer

A)  $163,420. 
B)  $151,420. 
C)  $139,420. 
D)  $100,000. 
E)  $142,000. 
A)  $163,420. 
B)  $151,420. 
C)  $139,420. 
D)  $100,000. 
E)  $142,000.

Question 11

Eden acquired a 20% interest in the partnership by contributing a total of $71,500 directly to the other four partners.Goodwill is to be recorded.Profits and losses have previously been split according to the following percentages: Adams, 15%; Barnes, 35%; Cordas, 30%; and Davis, 20%.After Eden made his investment, what were the individual capital balances?

Accepted Answer

The partners' capita

Question 12

The disadvantages of the partnership form of business organization, compared to corporations, include

Accepted Answer

A)  The legal requirements for formation. 
B)  Unlimited liability for the partners. 
C)  The requirement for the partnership to pay income taxes. 
D)  The extent of governmental regulation. 
E)  The complexity of operations. 
A)  The legal requirements for formation. 
B)  Unlimited liability for the partners. 
C)  The requirement for the partnership to pay income taxes. 
D)  The extent of governmental regulation. 
E)  The complexity of operations.

Question 13

What is the new total balance of the partnership accounts?

Accepted Answer

A)  $ 84,000. 
B)  $140,000. 
C)  $176,000. 
D)  $200,000. 
E)  $400,000. 
A)  $ 84,000. 
B)  $140,000. 
C)  $176,000. 
D)  $200,000. 
E)  $400,000.

Question 14

What was the total capital balance for the partnership at December 31, 2017?

Accepted Answer

A)  $600,000. 
B)  $564,000. 
C)  $535,000. 
D)  $523,000. 
E)  $545,000. 
A)  $600,000. 
B)  $564,000. 
C)  $535,000. 
D)  $523,000. 
E)  $545,000.

Question 15

What are the remaining partners' capital balances after Howell's interest is dissolved, assuming the goodwill method is applied?

Accepted Answer

Madrid: $33,000 = ($

Question 16

The dissolution of a partnership occurs

Accepted Answer

A)  Only when the partnership sells its assets and permanently closes its books. 
B)  Only when a partner leaves the partnership. 
C)  At the end of each year, when income is allocated to the partners. 
D)  Only when a new partner is admitted to the partnership. 
E)  When there is any change in the individuals who make up the partnership. 
A)  Only when the partnership sells its assets and permanently closes its books. 
B)  Only when a partner leaves the partnership. 
C)  At the end of each year, when income is allocated to the partners. 
D)  Only when a new partner is admitted to the partnership. 
E)  When there is any change in the individuals who make up the partnership.

Question 17

Cherryhill and Hace had been partners for several years, and they decided to admit Quincy to the partnership.The accountant for the partnership believed that the dissolved partnership and the newly formed partnership were two separate entities.What method would the accountant have used for recording the admission of Quincy to the partnership?

Accepted Answer

A)  The bonus method. 
B)  The equity method. 
C)  The goodwill method. 
D)  The proportionate method. 
E)  The cost method. 
A)  The bonus method. 
B)  The equity method. 
C)  The goodwill method. 
D)  The proportionate method. 
E)  The cost method.

Question 18

Under what circumstances does a partner's balance in his or her capital account have practical consequences for the partner?

Accepted Answer

The most direct practical consequence of

Question 19

Brown and Green are forming a business as partners.If they do not create a formal written partnership agreement, what risks are they exposing themselves to?

Accepted Answer

Due to the fact that business partners a

Question 20

Determine the amount of net income allocated to each partner for 2017.

Accepted Answer

Distributi

Exam 14: A: Partnerships: Formation and Operation

What will be the amount of interest attributed to Cleary in the income distribution for 2019?

C contributes $38,000 to the partnership and the bonus method is used.What amount will be credited for C's beginning capital balance?

Which of the following could be used as a basis to allocate profits among partners who are active in the management of the partnership? 1) Allocation of salaries. 2) The number of years with the partnership. 3) The amount of time each partner works. 4) The average capital invested.

What was the balance in Thurman's Capital account at the end of the second year?

Which of the following is not a characteristic of a partnership?

Which of the following type of organization is classified as a partnership, or similar to a partnership, for tax purposes? (I.) Limited Liability Company (II.) Limited Liability Partnership (III.) Subchapter S Corporation

Record the journal entry to allocate the salary of Noris.

By what methods can a person gain admittance to a partnership?

Which of the following statements is correct regarding the admission of a new partner?

What was Cleary's capital account balance at the end of 2018?

The disadvantages of the partnership form of business organization, compared to corporations, include

What is the new total balance of the partnership accounts?

What was the total capital balance for the partnership at December 31, 2017?

What are the remaining partners' capital balances after Howell's interest is dissolved, assuming the goodwill method is applied?

The dissolution of a partnership occurs

Under what circumstances does a partner's balance in his or her capital account have practical consequences for the partner?

Brown and Green are forming a business as partners.If they do not create a formal written partnership agreement, what risks are they exposing themselves to?

Determine the amount of net income allocated to each partner for 2017.

The Equity Method of Accounting for Investments

A: the Equity Method of Accounting for Investments

Consolidation of Financial Information

A: Consolidation of Financial Information

Consolidations - Subsequent to the Date of Acquisition

A: Consolidations - Subsequent to the Date of Acquisition

Consolidated Financial Statements and Outside Ownership

A: Consolidated Financial Statements and Outside Ownership

Consolidated Financial Statements Intra-Entity Asset Transactions

A: Consolidated Financial Statements Intra-Entity Asset Transactions

Variable Interest Entities, Intra-Entity Debt, Consolidated Cash Flows, and Other Issues

A: Variable Interest Entities, Intra-Entity Debt, Consolidated Cash Flows, and Other Issues

Consolidated Financial Statements - Ownership Patterns and Income Taxes

A: Consolidated Financial Statements - Ownership Patterns and Income Taxes

Segment and Interim Reporting

A: Segment and Interim Reporting

Foreign Currency Transactions and Hedging Foreign Exchange Risk

A: Foreign Currency Transactions and Hedging Foreign Exchange Risk

Translation of Foreign Currency Financial Statements

A: Translation of Foreign Currency Financial Statements

Worldwide Accounting Diversity and International Accounting Standards

A: Worldwide Accounting Diversity and International Accounting Standards

Financial Reporting and the Securities and Exchange Commission

A: Financial Reporting and the Securities and Exchange Commission

Accounting for Legal Reorganizations and Liquidations

A: Accounting for Legal Reorganizations and Liquidations

Partnerships: Formation and Operation

Partnerships: Termination and Liquidation

A: Partnerships: Termination and Liquidation

Accounting for State and Local Governments, Part I

A: Accounting for State and Local Governments, Part I

Accounting for State and Local Governments, Part II

A: Accounting for State and Local Governments, Part II

Accounting for Not-For-Profit Entities

A: Accounting for Not-For-Profit Entities

Accounting for Estates and Trusts

A: Accounting for Estates and Trusts

Filters